Xstrata Copper has entered into an agreement with Exco Resources to acquire the E1 and Monakoff copper tenements in north west Queensland, Australia, for a cash purchase price of A$175 million, to expand production at its Ernest Henry Mining operation. The transaction remains subject to a number of conditions being satisfied including Exco shareholder approval. The Exco Board has endorsed the transaction.
Strategically located close to the Ernest Henry Mining processing facilities, the E1 and Monakoff tenements contain open-pit copper mineral resources with completed feasibility studies. The production from these deposits would make an incremental contribution to Ernest Henry’s production profile from the second half of 2012, including gold by-product credits. Ore would be trucked from the E1 and Monakoff copper projects to Ernest Henry and processed through the operation’s existing concentrator.
“Ernest Henry’s open-pit operations are scheduled to finish later this year and we are currently in the process of transforming the site into a major underground mining operation with an associated magnetite extraction plant,” said Steve de Kruijff, COO-North Queensland Division, Xstrata Copper. “The E1 and Monakoff copper projects offer an attractive opportunity to expand Ernest Henry’s expected production profile by using the remaining capacity of the Ernest Henry concentrator while leveraging other significant synergies available through our existing site infrastructure, equipment and workforce.”
Xstrata Copper expects initial production from the E1 and Monakoff copper projects to commence in the second half of 2012.